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Organizational Theory

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Autor:  anton  03 September 2010
Tags:  Organizational,  Theory
Words: 2372   |   Pages: 10
Views: 698

Question #1

“Despite the economic progress brought about in part by scientific management, critics were calling attention to the ‘seamy side of progress’ which included severe labor management conflict, apathy, boredom, and wasted human resources to examine the discrepancy between how an organization was supposed to work versus how the workers actually behaved. In addition, factors like World War I, developments in psychology and later the depression, all bought into question, some of the basic assumptions of Scientific Management.” (Internet) This is where the Human Relations School steps in. Its primary focus is the importance of attitudes and feelings of workers, while informal roles and norms influence performance. “At the most general level, human relations theory views humans as social creatures who have a need and desire for communication and interaction.” (Internet) Numerous studies have been conducted over the years trying to come up with the most efficient form of workplace management. The most famous of these studies were those performed by the Hawthorne works (a.k.a. Hawthorne Studies) which should how work groups provide mutual support and effective resistance

to management techniques in order to increase production. This study concluded that workers did not seem to respond to the classical motivation approaches that were suggested by Frederic Taylor , but rather workers were interested in rewards and punishment within their own work groups. These studies, which were conducted in the 1920’s, started as a straight forward attempt to determine the relationship between the work environment and productivity. The results of the study led researchers to feel that they were dealing with socio-psychological factors that were not explained by classical theory which in turn, stressed the formal organization and formal leadership. The Hawthorne Studies helped to show that an organization is more than a formal arrangement of functions but at the same time performs the role of a social system. This position was taken by Elton Mayo , who made his own analysis of the Hawthorne experiments. He claimed that the problem of industrial societies acted as an imbalance between social and technical skills. “His analysis of the problems of industrial civilization and assessment of the human factor as nonlogical and emotional led him to view industry as a strategic integrating institution that could prevent social breakdown.” (Jaffe, 73) This would give management the responsibility of implementing communication and interaction with numerous employees. To Mayo, this was not only the key to organizational success, but also the goal to achieving social stability. He also viewed informal group processes as the promoting tool for social integration, as well as stopping absenteeism, turnover, and discontent among employees.

Another important person at this time was Chester Barnard, who combined practical experience in management and corporate affairs with a complex and sophisticated theory of organization and human behavior. His focus projected from an emphasis on the organization to an analysis of the nature of an individual. He placed priority on tension between the organization and the individual noting that “…organizations are constructed for particular purposes, but they employ individuals who may have widely divergent objectives and desires.” (Jaffe, 74) Barnard noted that cooperation was needed for the organization to work effectively and efficiently. He discussed in his book, The Functions of the Executive, the relationship between incentives and contributions, and the need to join these together to meet an equilibrium of some sort. He claimed that this system would satisfy individuals and obtain contributions from them while at the same time making everyone happy. To do this, he used distribution hoping to gain cooperative activity from the employees. The executive needs to note that distribution can be good in one situation but bad later on in another. This is were his theory of persuasion comes into play, hoping to change minds, “…and promote in-calculation of motives. Together, the methods of incentives and the method of persuasion form the central functions of the executive.” (Jaffe, 76) According to Barnard, the only way to gain cooperation from the employees is to find out what they want from the company. The executives can help to solve the situation by stating the goals of the company clearly, finding out where the informal networks are, tapping into the networks, explaining the goals through the networks, and finally, by backing off. Still throughout his studies, Barnard struggled with the tension between accommodating the human factor, and deciding that social control within the organization is the goal to achieve.

Another important person to discuss at this time is Douglas McGregor, one of the great popularizers of Human Relations approach with his Theory X and Theory Y. Theory X management assumes that most people prefer to be directed, are not interested in assuming responsibility, but prefer to be directed while also wanting to ensure safety. Such people seem to be motivated by money, benefits, and the fear of punishment. Management therefore attempts to structure, control and, closely supervise their employees. This kind of external control is most appropriate when dealing with employees who respond like this. “…McGregor’s observations regarding the reaction of humans to Theory X styles of management, and the unique human capacity for developing new and different needs, led him to propose a ‘different theory of the task of managing people based on more adequate assumptions about human nature and human motivation.” (Jaffee, 80) However, McGregor developed an alternative to Theory Y. This theory proclaimed that people were not lazy and unreliable by nature. This theory assumes the notion that people can be self directed and creative at work when properly motivated. He claims that it is essential for management to create an environment and culture where employees can display this directiveness and creativity. Overall, he believes that properly motivated people can achieve their own goals by best directing their own efforts toward accomplishing the organization’s goals.

Both the rise of the human relations theory and strategy, accompanied by and Chester Barnards’ model of organization, place the human factor at the center of their studies. I think these studies add much to our knowledge of human behavior in organizations and creat pressure for management to change their ways of managing human resources. The Human Relations Movement seemed to push managers toward gaining support from lower levels in the organization while solving problems within the organization. This lower case movement also provided a more open and trusting environment while placing greater emphasis on groups rather than on individuals. These studies should always be of great importance when trying to maintain employee satisfaction in the workplace.

Question #2

“As the international economy slowly became a more global economy in the 1960’s and 1970’s, the national bargain that had characterized labor-capital-state relations since World War II began to fray at the edges. Fordism did not disappear overnight; indeed many aspects of Fordism are still with us today. However, the perpetuation of Fordism from the late 1960’s was becoming increasingly difficult as the international economy began experiencing a series of qualitative changes as a result of times-space compression, technological changes in production, market changes, rising foreign competition and a generalized crisis of consumption.” (Internet) The concepts of “post-Fordism” (sometimes referred to as neo-Fordism) are used as tools to describe the multiplicity of different changes that started to take place in the late 1970’s and increasingly intensified throughout the 1980’s and 1990’s.

From these changes came new features in manufacturing, management, and technology. First is JIT (Just-in-Time) Manufacturing, which was in contrast of the Fordist “just in case” manufacturing system, where parts and spare components exist as stockpiles. The principle of JIT is to minimize inventory at each stage of the production process because surplus inventory tends to represent unrealized value in a company. This process was originally adapted by the Japanese due to scarce and lead conditions of post-war Japan. The JIT principle requires that parts arrive “just in time” for their use in the production process. Production using this principle changed the whole production process since it required tremendous coordination, involved timing precision, and assumed considerable flexibility on the part of the workers. It is no longer determined by the speed of the flow of an assemble line. Production is now determined by the team work efficiency of the various units of the production process. As Waters, (Globalization, 83) notes: “An important consequence is that control over workers must be established by alternative means than those given in the flow of the assembly line, including long term incentives to continuous worker loyalty in terms of job security, promotion possibilities and family welfare. JIT implies multiskilling, so that surplus labor time can be employed, and localized decision-making about which parts, requirements and production.” (Internet) With the JIT Manufacturing came an emphasis on total quality control and total quality management, which were both popularized by Janpanese corporations. This occurred because JIT required all arriving parts to be defect free and the flexibility of JIT manufacturing to assume total quality management structures which quickly identified systematic failure and “bottlenecks” in the production process.

Another feature of post-fordism was the use of CAD/CAM (Computer Aided Design and Computer Aided Manufacturing). Rather than dealing with fixed machines and rigid technologies, post-fordism was characterized by the increasing use of flexible, re-programmable “smart” machines. The consequences of the use of CAD/CAM differ from corporation to corporation and from sector to sector. Nevertheless, it can be said that it will most likely create a new elite of highly paid industrial engineering and computer programming professionals while enabling the workforce to be reduced (especially if there is a move to use more robots in the manufacturing process).

Next is the Fragmentation of the Fordist National Bargain or the Rise of the Bifuricated Labor Market. Increasing transnationalization has fragmented the Fordist National Bargain and replaced it with a “bifurcated labor market”. This comprises a highly skilled elite core of workers that have job security, high wages, and full benefits in return for total corporate loyalty, and working overtime on a regular basis, and an outer ring of secondary workers with no job security, low wages and benefits vs US auto worker wages and an lower level of disposable semi-skilled or unskilled workers who are paid minimum wage.

Finally, flexibility compromises two important types, numerical and functional within a company. First is numerical flexibility which is the ability to shrink the corporation or expand it as times demand. The mechanisms of achieving numerical flexibility include temporary work, part-time work, homeworking, outworking, and the most important, subcontracting which involves the feeding of routine corporate work to the low paid, non-union firms, and workers on a contract by contract basis. Corporations tend to like numerical flexibility because they can retreat in times of economic downturn. The other type of flexibility is functional flexibility, which includes the widening of job classifications, hours of work, assignments, and work structures. Workers are forced to move away from the traditional 9 to 5 fordist day to flex-time schedules and around the clock shifts.

I think that it is important that the post-fordism features came about in the 1980’s and 90’s. These features are still seen throughout corporate America, especially when flexibility is involved. Flexibility is most commonly seen in most businesses in the world today. I feel that this is the most important feature within every company. Employees are able to work better with flex hours and work structures. Overall, I think that this should be continued in years to come.

Question #3

Pennsylvania-American Water Company is the largest regulated water utility in the state. It is a wholly-owned subsidiary of American Water Works Company, Inc., the largest investor owned water business in the United States. The company was established in 1989 through the merger of the following former entities: Western Pennsylvania Water Company, Keystone Water Company and Riverton Consolidated Water Company. These companies are also owned by American Water Works Company, Inc. The customers live in 317 municipalities encompassing 33 of the state’s 67 countries. This includes water service to 568,000 residences or over 2 million people and wastewater service to 11,000 residences or approximately 33,000 people.

Headquartered in Hershey, Pennsylvania-American has five geographically diverse operating areas. The Eastern area distribution systems serve a population of approximately 325,000 people in 11 central and eastern Pennsylvania counties. Communities that are serviced within this region include Norristown, Yardley, Lewisburg, Philipsburg, Miton, Frackville and the West Shore of Harrisburg with the regional office located in Mechanicsburg. Another region that the company services consists of a population of 26,000 customers in Chester and Lancaster Counties, with the regional office located in Coatsville. The Northeastern area distribution system serves an estimated population of 550,000 customers in 66 communities and 8 counties. Cities included in this area are Scranton, Wilkes-Barre, Nanticoke, Pittston, and Carbondale as well as the Poconos. This areas regional office is located in Wilkes-Barre. The largest contiguous distribution system in the American Water Systems is located throughout Allegheny County, providing water to an estimated 550,000 customers. This service area includes the City of Pittsburgh and the suburban South Hills with its regional office located in Mt. Lebanon. Finally is the Western Region, which services an estimated 575,000 in western Pennsylvania. This area includes the communities of Indiana, New Castle, Butler, Washington, Mon Valley, and Uniontown areas, with the regional office based in McMurray.

The company’s water supply is provided principally from surface water supplies such as rivers, streams and lakes through allocation permits from the Pennsylvania Department of Environmental Protection and several river basin commissions. Water is also provided from wells and through purchase contracts and interconnection with other water providers in the area.


Business Ethics, October 1987. Vol. 6 Issue, p 559, p7, The Imperative of Organizational Harmon.

Jaffee, David. Organization Theory: Tension and Change. Hill-McGraw, New York, New York. 2001.

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